Analysts Back Etsy Stock Despite Post-Earnings Drop

Calls have been popular among ETSY options traders

Emma Duncan
Aug 2, 2019 at 9:48 AM
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Shares of small shops platform Etsy Inc (NASDAQ:ETSY) are sinking this morning, down 5.3% at $64.50, at last check. Despite reporting a second-quarter earnings beat of 14 cents per share, the company's revenue missed estimates. Analysts do not seem deterred, however, with no fewer than three price-target hikes and one bullish reiteration already on the books. 

Specifically, Loop Capital reiterated its "buy" rating and $80 price target, saying "improvements to the buyer experience and marketing investments should drive better customer growth and frequency in future periods, and [we] recommend that investors step into any weakness in the shares." Meanwhile, RBC, Wedbush, and Stifel raised their price targets to $63, $64, and $70, respectively. Coming into today, 10 of 15 covering analysts carried a "buy" or "strong buy" rating on Etsy stock.

Looking at options, data from the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows the security with a 10-day call/put volume ratio of 4.92 that ranks in the 78th percentile of its annual range. This means calls have been bought to open over puts at a quicker-than-usual clip of late.

On the charts, ETSY has spent the past few months bumping up against resistance in the $70 neighborhood. Emerging as support has been the rising 140-day moving average, though the shares are on pace to breach that trendline today. But despite this morning's plunge, ETSY remains 36% higher year-to-date.


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